5 Direct Marketing Retargeting Best Practices to Boost Conversion

As any retailer knows, bad retargeting is nothing more than following abandoned consumers around the internet wasting money on irrelevant media buys. When done well, however, retargeting can provide great conversion rates at a lower cost per acquisition.

The most profitable retargeting efforts focus on consumers who have either viewed products but haven't yet made a purchase or who did make a purchase and are likely to buy another related product. In either case, the overall strategy is to attract the consumer at the right time for the right cost. Once identified as suitable to receive a retargeting message, there are five concepts that must be employed to achieve success:

1. Understand the buying cycle. Every product fits into a buying cycle that has its own time frame. Think about apparel vs. furniture: A consumer looking for a bathing suit is likely to make a purchase much sooner than one looking for a sofa. This short buying cycle creates a narrow window of opportunity to market the product being considered, and a much longer one for those considering buying a sofa. Understanding your buying cycle allows for a time frame of appropriate media delivery.

2. Dynamic content is critical. In the above example, it's easy to think a good solution is to simply send a general or brand ad to the bathing suit consumer. Then it doesn't matter if the buying cycle has ended, right? Wrong. Exposing consumers to general store advertisements is a lazy marketing technique and, frankly, ineffective. If it's known that a consumer looked at a particular product or category, that's valuable information that should be leveraged. That consumer should be incentivized to return to the conversion funnel with a dynamic ad or specific offer, one that's customized to what's already known about her.

3. Determine your frequency cap. Serve an ad too infrequently and it may get missed; too often and it becomes noise. Through testing, determine a frequency curve and hone in on the sweet spot where the frequency is enough to effectively convey the message, but not so much that it overwhelms the consumer — or even worse, after the consumer is no longer in the market. Determine the point of diminishing returns and establish a frequency cap. Any media buys after this cap are counterproductive and wasteful.

4. Connect the dots between in-store and online sales. There's a timetable between when a consumer looks at a product online and visits a brick-and-mortar store. Though this can be difficult to benchmark, talented marketers have good information and should put it to use. The time after a product is viewed online but before a store visit is made is the critical time for retargeting. Understanding the relationship between online and in-store sales will determine what to say, how often to say it and when to stop saying it.

5. Know your best customer. What do the segments of people who have the highest lifetime value to your company look like? Smart marketers use this information on the front end of every strategy. The strongest retargeting efforts should be made to these high-value consumers, who may have looked but didn't purchase. They are the people most likely to become your best customers with the highest return on investment and most profitable lifetime value. The ultimate goal of marketing is to leverage information on what the most valuable customers look like, then target them.

Intelligently designed and implemented retargeting campaigns are instrumental in keeping consumers engaged as well as encouraging conversion. Just make sure to do it properly, or else you're throwing good money after bad.

Ryan Woolley is senior vice president, digital marketing services, at Response Mine Interactive, a digital marketing agency.